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COMPANY WITH TIES TO MINISTERS MAY GET €40M DEAL TO SUPPLY CLASSIFIED DATA NETWORK

Secrecy surrounds data contract

SLOVAKIA could soon have a new €40 million central network for transmitting and storing classified information. So who will get the contract, and why? We may never know.

SLOVAKIA could soon have a new €40 million central network for transmitting and storing classified information. So who will get the contract, and why? We may never know.

Under the terms of the Public Procurement Act, the National Security Bureau (NBÚ) does not have to inform the public of the results or even the existence of this contract. Services and goods that are deemed secret by the buyer are exempt from the country’s procurement rules, meaning even multi-million orders can be awarded directly, without notice and without competition or transparency.

The NBÚ has so far only awarded a €330,000 contract to prepare a pilot project for the network. The deal was signed on June 24 last year with Vizada Networks, a company formerly known as Telenor.

The Bureau wanted to go ahead with construction of the network, but the government has not yet released funding for it. NBÚ Director František Blanárik told The Slovak Spectator that the delay was due to the economic situation and the need to cut back on spending. At the same time, he said, when the funding arrives, Vizada is almost certain to receive the network contract as well, seeing as it did the pilot study, and is the only IT firm in Slovakia with the necessary security clearance to do the work. “It’s a logical assumption,” he said.

No logic



Vizada was rebranded last year from Telenor Slovakia. Until August 2006, the company’s executive director was current Finance Minister Ján Počiatek. When asked if this fact could have influenced the selection of Vizada Networks by the NBÚ, ministry spokesman Miroslav Šmál said that Počiatek “never played any role in Vizada Networks, he was an employee of Telenor Slovakia. Neither Vizada Networks nor its owners have anything to do with Telenor”.

In fact, Vizada has a great deal to do with Telenor. The company arose from a fusion between units of the Norwegian Telenor and France Telecom at the end of 2007.

The current managers of Vizada Networks, Iveta Iváková and Tore Morten Olsen, held the same positions with Telenor Slovakia during Počiatek’s time there.

Another firm that had contacts with both Telenor and Vizada is the law office of Majeriková, Koštial, Turčan & Partners. Current Interior Minister Róbert Kaliňák did his legal training with this firm from 1995 to 1999, and later worked as a lawyer there. He was also a co-owner of the Equity company with the partners of the law office.

And Majeriková & Partners have long represented Vizada/Telenor, including in 2008 on the basis of a Power of Attorney, according to company records in the Collection of Documents at the business registry.

Kaliňák’s spokesman, Erik Tomáš, said that this relationship had nothing to do with Vizada’s receiving the NBÚ project.

“This law office provided the company with legal services only,” he wrote. “For that reason, the connections you are suggesting are illogical.”

The NBÚ said it needed the new network because at the moment no one has a complete overview of what secret data is circulating in the country. NATO and the EU send classified information through separate channels to various ministries and state institutions, and that data is then stored in different locations.

According to the NBÚ, in 2007 there were 600 files in the country rated secret or top secret.

“The current system is very fragmented, and our foreign partners have said they would welcome it if we had a centralised overview of the movement of classified information,” said the deputy director of the NBÚ, Jozef Mesároš, in an interview with The Slovak Spectator.

Blanárik rejected speculation that the ties between Vizada, Počiatek and the law office close to Kaliňák could have influenced his selection of Vizada.

“I didn’t even know that Počiatek worked there, nor did I know the connection with the law office until I received your email,” he said.

On the other hand, Blanárik said the NBÚ had had good experiences with Vizada during the building of “a secure international communications network”.

Integrator



If Vizada Networks does actually get the €40 million contract, it will not be building the network alone.

“Vizada Networks is the integrator for the project of building a backbone network for the transmission of classified information,” said Mesároš.

In the IT sector, an integrator is a company who takes a contractor’s requirements, and matches them with providers on the market.


“We expect that other firms will be brought in to provide the services and technology required, because the scope of the project is beyond the capacity of a single company.”

Vizada Networks did not respond to questions about the tender, even though the company was given more than two weeks. The head of its Slovak office, Valérie Valovičová, repeatedly said that she was unable to get in touch with the competent person in Norway.

Funding for the secret network remains uncertain. On January 9 last year, the government set up an inter-ministry commission to oversee the project.

Emília Beblavá, head of the local corruption monitor Transparency International Slovakia, said that the awarding of secret contracts was one of the greatest weaknesses in public procurement.

“We see goods and services being declared secret, and thus exempt from procurement law, in many cases where it is not necessary,” she said. “But there is no institution in Slovakia to check up on individual cases.”

Helena Fialová, the spokesperson of the Public Procurement Bureau, confirmed that her office had no power to check whether secret contracts were really secret. Rulings on whether goods and services should be classified are made by the institution doing the contracting.

Murky contracting for secret purposes is a problem in other countries as well. The European Parliament is currently debating a new directive that would require secret contracts to at least be publicly reported, and that state institutions be required to award deals on the basis of the lowest cost.

“Most defence and security equipment is bought on the basis of uncoordinated national rules,” the directive reads. “These rules differ enormously in what they require in terms of advertising, procedures, selection criteria, etc. These discrepancies... create room for conflict with the principles of transparency, non-discrimination and equal treatment.”

“We expect the directive to be approved this year,” said Fialová.

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